8 Tips on Improving Reservation of Rights Letters

March 10, 2009

  • March 10, 2009 at 2:59 am
    Mac McDermott says:
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    The letter must have a simple – plain English alert / warning – preferred to be in bold print.

    THE PURPOSE OF THIS LETTER IS TO ADVISE YOU THAT THERE IS OR MAY BE A QUESTION OF COVERAGE UNDER YOUR POLICY OF INSURANCE

    Then explain what has been discovered to date, quote the policy portions that may apply, then tell the insd what you (the insurer) plan to do.

    Next – you need to include the language THIS RES OF RIGHTS LETTER PLACES YOU ON NOTICE THAT (insurer) reserves their right to deny coverage if investigation determines that coverage is not available.

    Offer them the right to consult their atty – copy their agent – send it cert mail – return receipt

    invite them to contact you immediately if any portion of the letter is confusing or not understood.

    THEN YOU MUST UPDATE THE RES OF RIGHTS AS YOUR INVESTIGATION continues. If you discover new issues – you write a new letter with the new discovery and you cite when you discovered these new issues.

    And for the record, if you don’t send the res of rights out EARLY in the file – you probably have waived your right to avoid coverage later – it is YOUR duty to know coverage – not the insured.

    The courts will not let you off just because you later identified a coverage issue if you had free access to all the insd info and failed to reserve your rights.

    Good luck!!!Mac

  • March 10, 2009 at 4:39 am
    Calif ExPat says:
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    hey Mac – right ON !

    Your suggestions MUCH better than the article author’s in my opinion – and I have writen more than a few RoR letters in my time.

    Also – less is more – keep the words simple – avoid boilerplate where possible (and it’ always possible) – and be a belt and suspenders adjuster and write an ROR even if you have a notarized and signed Non-Waiver agreement from the Insured.

    Great pointer as to serial RoR letters as new facts are developed. As with Chicago voters ‘early and often’ is the rule is keeping the Insured informed.

  • December 13, 2009 at 1:30 am
    Anonymous says:
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    “requiting” should be “requiring”



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